NEW YORK (TheStreet) -- Ford (F) shares are down 17% since reaching a 52-week high of $18.12 in July. And the shares took another pounding Monday and Tuesday after the company lowered its 2014 pre-tax profit projections to $6 billion, down from a prior range of $7 billion to $8 billion.
Investors were spooked when Ford, which makes the popular F-150 truck, also projected a pretax loss of $1.2 billion in Europe in 2014 and a loss of $250 million in 2015. (Back in July, the company said it was on track to make a profit in Europe in 2015.) At $14.80, the stock price at 1 p.m. Tuesday, Ford has posted year-to-date losses of 3.9%, trailing the 6.8% gain of the S&P 500 (SPY) .
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But there's value here. And investors shouldn't wait around for a better opportunity to buy.
Given that the stock is trading at just nine times trailing earnings -- 18 points below General Motors (GM) -- these shares are cheap. Ford's price-to-earnings multiple of 9.1 is about half that of the average price-to-earnings ratio of the companies in the S&P 500.
But Ford stock still has a high analyst target of $23, according to Yahoo! Finance. This suggests a possible premium of more than 50%. And even if Ford were to only reach its median target of $20, investors can still make 32% on the stock while collecting the 3.4% yield.
Monday's 7% decline in Ford stock and Tuesday's continued slide are an overreaction.
These new trucks will sport an aluminum body that is considered more fuel-efficient. And the F-150s can become an excellent source of long-term growth for Ford. Despite Ford's September sales slump, long-term revenue and profits goals remain intact.
But Ford has plenty of challenges to overcome.Must Read: AIG Lawsuit Puts Spotlight on 2008 Financial Crisis Response